Tech companies are cutting staff at a faster pace than last year as they redirect spending toward artificial intelligence, and analysts warn the reductions could spread beyond the industry. More than 200,000 workers have been cut so far in 2026, according to the TrueUp tech layoffs tracker cited by CNET. Analysts caution that if job losses extend into retail and finance, another 1.6 million people could be laid off, pushing the formal unemployment rate closer to recession levels.
Meta began laying off 8,000 people in May, a cut that came after setbacks including the death of the metaverse and multibillion-dollar court losses. Google recently extended its voluntary buyout program to select employees in five countries, and the graphic design platform Canva cut staff by 22%, laying off or relocating 1,271 employees. Companies that have laid off or offered buyouts to 1,000 or more employees this year include Microsoft with 60,000, Oracle with 21,000, Amazon with 17,000 in addition to 14,000 in 2025, Uber with 3,300 and Netflix with 1,000.
AI is the dominant factor behind the cuts. Companies have spent billions on the technology, plus $3.2 trillion that Goldman Sachs says does not appear on balance sheets. With returns failing to justify the scale of capital expenditure, companies are reducing labor costs and relying on AI to offset productivity losses, even at profitable organizations with strong revenues.
The US is not officially in a recession, and layoffs do not appear to be spreading to other industries, with overall job cuts the lowest since 2022. Lisa Countryman-Quiroz, CEO of the workforce nonprofit JVS Bay Area, said the job market has become increasingly precarious for younger workers and that she is concerned about the erosion of stable career pathways. Entry-level hires are down by a third in the most AI-exposed occupations since 2021, a trend that could affect retail and finance, and healthcare added 42,000 jobs last month.
Some companies have reversed course. Salesforce and Ford rehired or hired new people after AI-driven layoffs. Canva offered outgoing employees six months of salary, a year of healthcare, a year of LinkedIn premium, a $10,000 grant to start a business and their MacBooks.
The 2026 midterms could indirectly affect tech layoffs through the political and regulatory environment around AI and data centers. Backlash over data centers became an issue for candidates, and campaigns around data center moratoriums helped some Democratic candidates, including Gina Hinojosa, the surprise gubernatorial winner in Texas. Technology and AI-linked stocks fell as investors worried Democrats might impose new guardrails on AI. Countryman-Quiroz said federal funding is sufficient to train only about 200,000 workers per year and suggested Congress invest in job training, especially in healthcare.
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